Gold turns flat, holds steady around $1900 mark
- A modest pickup in the USD demand exerted some pressure on gold.
- A fresh leg down in the equity markets helped limit any deeper losses.
Gold reversed an intraday dip to the $1891 area and was last seen trading in the neutral territory, around the $1900 mark during the early European session.
The precious metal came under some renewed selling pressure on Thursday and eroded a part of the previous day's recovery move from one-week lows. A stronger US dollar was seen as one of the key factors exerting pressure on the dollar-denominated commodity, though a combination of factors helped limit deeper losses.
Investors remained cautious in the wake of a setback in the development of a vaccine for the highly contagious coronavirus disease. Adding to this, concerns about a rapid rise in new COVID-19 cases and the impasse over the next round of the US fiscal stimulus measures benefitted the greenback's status as the global reserve currency.
However, a fresh leg down in the equity markets underpinned the precious metal's relative safe-haven status. The risk-off mood was reinforced by a weaker tone surrounding the US Treasury bond yields, which extended some additional support to the non-yielding yellow metal and helped limit any deeper losses, at least for now.
Market participants now look forward to the US economic docket, highlighting the release of Philly Fed Manufacturing Index, the usual Initial Weekly Jobless Claims and Empire State Manufacturing Index. The data might influence the USD price dynamics, which, along with the broader market risk sentiment, might produce some trading opportunities.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
